The Barron's 400 Index

The Barron's 400 Index, or B400, was jointly
developed by Barron's and MarketGrader and introduced on the cover of
the September 3, 2007 issue of Barron's magazine.

The index "collects the most fundamentally sound and attractively priced stocks from all corners of the market, using a proven and disciplined stock-selection process." It does not strive to be a benchmark representing the overall market but rather to give investors access to America's most promising stocks. Nearby you may read more about its methodology and its construction process by clicking on any of the issues on display or you may download the official index fact sheet.

A Measure of Long-Term Capital Appreciation in U.S. Equities

The Barron's 400 index tracks the market heaviest hitters based not on size but on the strength of their fundamentals. It's up more than 100% since its introduction in 2007, more than 40% higher than the overall U.S. stock market1. It's an innovative measure of U.S. equities, made up of companies that score highest when evaluated against fundamentals-based criteria using a growth-at-a-reasonable-price (GARP) approach to investing. Calculated by NYSE, the Barron's 400 combines proprietary analytics with a rules-based methodology that focuses on long-term capital appreciation.

1The Barron's 400 Index had a cumulative price-only return of 100.8% from August 31, 2007 through August 31, 2017. By comparison, the Russell 3000 Index, used as a proxy for the overall U.S. stock market, had a cumulative price-only return of 71.4% during the same period. Source: Bloomberg.

B400 vs. Benchmarks, 10 Year Performance.

Methodology

The Barron's 400 is built from the "bottom-up" using a
methodology that is quite different from most traditional market
benchmarks. Its key attributes:

Fundamental Selection

All index components are selected on the basis of their fundamental strength as measured by MarketGrader's overall grade. This grade is based on 24 fundamental indicators across growth, value, profitability and cash flow, each measured by six unique factors, which in many cases are industry or sector-specific. The result from all 24 indicators is a single numerical score--our overall grade--from zero to 100, which ultimately determines the stocks selected to the Barron's 400.

Equal Weighting

All 400 index components are equally weighted in the index at
each semi-annual rebalance. This prevents a small minority of huge
companies from steering the index, while giving smaller issues equal
opportunity to contribute to the Barron's 400's overall performance. By
definition, then, each stock represents, after each selection, one
quarter of one percent of the overall index.

Diversification and Liquidity

Once all stocks in MarketGrader's U.S. universe of 4,600 are graded and ranked, a series of screens is applied to ensure the index is diversified and that its underlying components have sufficient liquidity. The number of entries from any single sector is capped at 80, or 20% of the index, while REITs are altogether ineligible. All stocks must have a minimum float-adjusted market cap of $250 million while at least 25% of the components must have a market cap of $3 billion. And to ensure liquidity, all stocks must have a minimum three-month average dollar-trading volume of $2 million.

Rebalance Discipline

Every six months, on the third Friday of March and September, the
Barron's 400 Index goes through a reconstitution and rebalance process.
This ensures that only those companies with the strongest fundamentals
are regularly selected.

"The Barron's 400 IndexSM" is calculated by NYSE or its affiliates and published by MarketGrader. "Barron's®," "Barron's 400SM" and "Barron's 400 IndexSM" are trademarks or service marks of Dow Jones & Company, Inc. or its affiliates and have been licensed to MarketGrader.